The Good, The Bad & The Ugly

Masonry Construction, May, 2005 by Damian Lang

Do you keep your people updated on how your company is doing? Do you show them as much income & expense information as possible? You should. If our key people don't know what our sales, profits, & losses are, how are they going to help us get better results? If you have read my book or articles I have written in the past, you know that I believe, "What Gets Measured, Gets Done". I teach seminars on how to measure & pay field employees based on total labor sales. Mason contractors from all over the country are seeing the results of measuring & paying field employees based on increased performance. They have found, like we have, that most employees don't mind producing more if they get a percentage of the increase. As long as the system is set up properly & fairly, it is fun for both the contractor & the field employees that are a part of the team. But what about office staff, superintendents & managers, shouldn't they get to know how the company is doing as well? The answer is yes. Show them everything. The Good, The Bad & The Ugly.

Most business owners don't show their employees their real sales numbers because they fear the employees will think the company is making too much money. (Your in business, be proud of the money you make!) Perhaps the employees will go into business for themselves seeking an easy road to profits? But as business owners know, there is no easy road to profits. So, why don't we just show the employees what we are going through by showing them the numbers? (Let's face it. Employees already think the company is making a fortune. In fact, they are probably less likely to strike out on their own if they know the truth.) The average mason contractor earns a net profit of only 2.5%, & the top in the industry earn 5%. At 2.5%, that's $25,000 on every one million in sales. Once they see how much it truly takes to run a business, they'll realize we are making much less than they thought we were. In fact, when you see the numbers for yourself, you may find out that you aren't making nearly as much as you thought you were! Don't be afraid to share the numbers with your employees.

Looking at the real numbers monthly makes a difference. I have had mason contractors tell me they are making 20% net profit every year, then two years later they are out of business. Obviously, these contractors were not keeping on top of company profit & loss statements. Waiting to find out how the company is doing at the end of the year has led to the failure of many companies. I recommend that all mason contractors have a monthly profit & loss prepared. This way they can make timely decisions to avoid profit shortfalls.

By the way, would it bother your people if you bought a getaway vacation home? How about if you buy a new truck? It shouldn't! I bet it wouldn't if they were being paid based on sales & profit instead of just by the hour. Life can be much easier for both you & your employees if you show them what the company is earning & give them a percentage of those earnings. Once you do have monthly profit & loss statements prepared, pay your office staff, superintendents and managers based on the outcome. You will be amazed at how much they start to care about your company staying profitable. You will also be amazed at the change in their attitudes. Employees become less interested in starting their own company after they see "The Good, The Bad & The Ugly" parts of running a business.